Gold prices hit record highs amid economic uncertainty and U.S.-China trade tensions. This week’s key events, including U.S. employment data and the UK’s bank rate decision, could drive market moves.
Technically, gold remains bullish above key support levels, with upside targets near $2,875 and $3,000. Fundamentals point to inflation risks and Fed policy shifts as key factors shaping its long-term trajectory.
Overview
Gold prices hit record highs amid economic uncertainty and U.S.-China trade tensions. This week’s key events, including U.S. employment data and the UK’s bank rate decision, could drive market moves.
Technically, gold remains bullish above key support levels, with upside targets near $2,875 and $3,000. Fundamentals point to inflation risks and Fed policy shifts as key factors shaping its long-term trajectory.
Key Economic Events
Wednesday 15:15 (GMT+2) - USA: ADP Non-Farm Employment Change (USD)
Wednesday 17:00 (GMT+2) - USA: ISM Services PMI (USD)
Thursday 14:00 (GMT+2) - UK: Official Bank Rate (GBP)
Thursday 15:30 (GMT+2) - USA: Unemployment Claims (USD)
Friday 15:30 (GMT+2) - Canada: Employment Change (CAD)
Friday 15:30 (GMT+2) - USA: Non-Farm Employment Change (USD)
Technical Analysis
After bouncing off the 2,536.79 low on November 14, Gold has been on an upward trajectory, setting new all-time highs propelled by a confluence of technical signals as well as economic and geopolitical uncertainty. The precious metal emerged above the 50-period Exponential Moving Average (EMA) thus signifying the buying pressure. Further supporting this bullish bias, momentum indicators remain strong. The Momentum Oscillator and the Relative Strength Index (RSI) continue to trade above their respective neutral levels of 100 and 50, highlighting persistent upward pressure and increasing the probability of further gains.
Potential Upside Targets
Should the buyers maintain market control, traders may direct their attention toward the four potential resistance levels below:
2868.44: The initial price target is set at 2868.44, which represents the weekly resistance, R2, calculated using the standard Pivot Points methodology.
2875.60: The second resistance is identified at 2875.60, representing the 261.8% Fibonacci Extension drawn from 2785.93 to 2730.51.
2919.78: The third resistance level is identified at 2919.78, reflecting the weekly resistance, R3, calculated using the standard Pivot Points methodology.
3000.00: An additional price target is projected at 3000.00, representing a psychological round number.
Potential Downside Targets
Should the sellers take market control, traders may consider the four potential support levels listed below:
2830.57: The first level of support is determined at 2830.57, representing the all-time high recorded on January 3.
2785.93: The second support is identified at 2785.93, representing the swing high from January 24.
2724.70: The third support level is identified at 2724.70, reflecting the daily high marked January 16.
2695.24: An additional downward target is 2695.24, mirroring the weekly support, S2, calculated using the standard Pivot Points methodology.
Fundamentals
Gold prices hit a record high on early Wednesday, driven by escalating U.S.-China trade tensions after Beijing imposed tariffs in response to new U.S. duties. Spot gold reached $2,853.97 per ounce before settling slightly lower, while U.S. gold futures rose to $2,879.70. Analysts suggest gold could push toward $3,000 if the trade war intensifies. Meanwhile, Federal Reserve officials warned that new tariffs could fuel inflation, potentially impacting interest rate decisions. Investors are also eyeing key U.S. economic data, including employment reports, for further market direction. Silver and platinum edged higher, while palladium declined.
According to CBS News article, gold's investment appeal depends on market conditions. In the short term, rising U.S.-China trade tensions and inflation concerns have pushed prices higher, making it attractive for traders seeking quick gains. However, long-term investors face uncertainty as higher interest rates could dampen demand. Analysts suggest gold may reach $3,000 if economic instability persists, but its long-term trajectory depends on inflation trends, central bank policies, and global risk appetite.
Conclusion
Gold remains in a strong uptrend, supported by economic uncertainty and geopolitical risks. With key economic data releases ahead, market volatility could drive further price movements. Technically, gold maintains bullish momentum, with potential upside targets near $3,000. However, inflation risks and central bank policies will play a crucial role in shaping its long-term outlook. Investors should closely monitor global developments for further market direction.